Banking
Africa’s Banking Market Second Most Profitable, Fastest Growing—Report
By Dipo Olowookere
A new report released by McKinsey & Company has revealed that the banking markets in Africa are among the most exciting in the world.
According to the McKinsey Global Banking report, the continent’s overall banking market is the second-fastest-growing and second most profitable of any global region, and a hotbed of innovation.
Nearly 300 million Africans are banked today, a number that could rise to 450 million in five years, the report said.
The report illustrates four segments of African markets – from the advanced markets like South Africa and Egypt, to fast-growing transition markets such as Kenya, Ghana and Cote D’Ivoire, to sleeping giants like Algeria, Nigeria and Angola, to nascent banking markets like DRC and Ethiopia.
The report finds that Africa’s top quintile banks – the so-called “winners” – are simultaneously 4 times more profitable and over 2 times faster growing than bottom quintile banks.
The report’s key findings are that these “winners” are defined by employing one or more of five winning practices.
The first is ‘draw the right map.’
In Africa, geography matters. About 65 percent of African banks’ profitability (measured by RoE) and 94 percent of their revenue growth are attributable to their geographic footprint. Importantly, the report highlights a shift in exchange-rate adjusted revenue pools North Africa, East Africa and West Africa, and away from South Africa.
The second is ‘right segments, compelling offers.’ It was discovered that 70 percent of revenue pool growth will occur in the middle segments, defined as earning between $6,000 and $36,000 in annual income. The mass market – individuals earning less than $6,000 per annum – accounts for 13 percent of the growth, but is the fastest growing segment. Whichever segment banks choose, having the right proposition is key. Its survey of 2,500 banking customers in 6 African countries finds that 25 percent of customers choose price as the most important factors in choosing banks. Equally important is convenience, also cited by 25 percent of customers. Service is the third most important factor, selected by 12 percent of customers. We also find huge cross-sell opportunities – while 95% of Africans have transaction products, fewer than 20 percent have lending, insurance, investment or deposit products.
The third is ‘leaner, simpler banking.’ Commenting on this, the report said ehile African banks’ cost: income has been falling, it found out that this is due to rising margins for banks, and their cost-to-assets ratio has actually been worsening. At 3.6 percent, Africa has the 2nd highest cost-to-assets ratio in the world. However, rapid efficiency gains are possible, and the research spotlighted eight African banks that have made strides in efficiency in the last five years, through a combination of three levers – end-to-end digitisation; sales productivity improvements fuelled by advanced analytics; back- and middle-office optimisation.
For the fourth point, it is ‘digital first.’ It was observed that 40 percent of Africans prefer to use digital channels for transactions. In four major African countries – South Africa, Nigeria, Kenya, Angola – a higher proportion of Africans prefer the digital channel for transactions to the branch channel. Given low branch density in Africa, banks need to employ a digital first approach. The report hones in on four themes of innovation emerging in Africa on digital – end-to-end digital transformations (e.g. Equity Bank); partnering with telco companies (e.g. CBA in Kenya or Diamond Bank in Nigeria); building a digital bank (e.g. ALAT in Nigeria); and building an ecosystem (e.g. Alipay in China).
The first point is ‘innovate on risk.’ According to the report, African banking still has the second highest cost of risk in the world. Poor data availability is part of the problem: 11 percent of Africans are on credit bureaus, compared to in excess of 90 percent in advanced markets. However, we are seeing innovations such as banks partnering with data and analytics fintechs like Jumo to improve credit underwriting; banks partnering with telcos to leverage telco data to issue small-ticket loans on mobile; and players employing payroll lending across countries.
This new report draws on the experience of McKinsey’s partners and colleagues serving banks across Africa; McKinsey’s Global Banking Pools research; a proprietary database of the financial performance of 35 of Africa’s leading banks; a survey of executives from 20 banks and financial institutions across Africa; and a broad-based survey of 2,500 banking customers from 6 African countries – South Africa, Egypt, Nigeria, Morocco, Angola and Kenya.
By Modupe Gbadeyanka
The Chartered Institute of Bankers of Nigeria (CIBN) has promised to support the ambitious plans of the Association of Corporate and Marketing Professionals in Banks (ACAMB).
At a meeting between the leaderships of the two organisations on Tuesday, the president of CIBN, Professor Pius Deji Olanrewaju, said it was impressed with the capability development and the undergraduate mentorship schemes of ACAMB under its leader, Mr Jide Sipe.
The CIBN chief commended the forward-thinking vision of the group, saying it had raised standards across Nigeria’s banking sector.
“ACAMB’s support has given CIBN and the banking sector brand equity,” he said, praising the association’s record in reputation management. recalling ACAMB’s role in addressing crises within the sector, describing the partnership as strategic and beneficial.
He further pledged support for ACAMB’s 30th anniversary in September 2026, its AGM, and other programmes, including fundraising initiatives.
“I want to assure you that everything you have presented today has been clearly noted and will be acted upon.
“We are fully committed to working closely with you so as to translate these discussions and vision into measurable progress. Our shared goal is to strengthen the sector, protect its reputation, and enhance its public image in a meaningful and lasting way.
“This meeting discussed various initiatives and reforms crucial for the future of our industry, including the need for continuous training and adaptation to new programs,” Mr Olanrewaju stated.
Speaking at the meeting, the president of ACAMB described the visit as a crucial first step in his tenure, aimed at contributing significantly to giving flight to his vision and that of ACAMB.
“When we assumed office, one of the first things we agreed on was the need to visit key stakeholders.
“However, before reaching out more broadly, we felt it was important to begin with our primary constituency and core stakeholders. We want them to understand the direction we are taking and to support the work we are doing, so that ACAMB can achieve greater success than it has in the past.
“We couldn’t have properly started our tenure without this very important meeting with the CIBN,” Mr Sipe stated
He introduced the newly constituted ACAMB Exco, which includes the 2nd Vice President, Morolake Phillip-Ladipo; General Secretary, Olugbenga Owootomo; Assistant General Secretary, Ademola Adeshola; Publicity Secretary, Abiodun Coker; and Executive Secretary, Fadekemi Ajakaiye.
By Modupe Gbadeyanka
Registration for the second HerFidelity Apprenticeship Programme (HAP 2.0) organised by Fidelity Bank Plc has commenced.
The Divisional Head of Product Development at Fidelity Bank, Mr Osita Ede, informed newsmen that the initiative was designed to empower women with sustainable entrepreneurship skills.
The lender created the flagship women-empowerment initiative to equip women with practical, income‑generating skills and structured pathways to entrepreneurship.
“HerFidelity Apprenticeship Programme 2.0 reflects our commitment to continuous improvement. Having evaluated feedback from the first edition, we have returned with stronger partnerships and deeper mentorship programmes to ensure that women acquire not just skills, but sustainable economic opportunities,” he said.
“At the heart of the programme is guided, real‑world learning. Participants will undergo intensive apprenticeship training under reputable institutions and industry experts across select fields such as hair styling, shoe making, auto mechatronics, and interior decoration,” Mr Ede added.
He noted that HerFidelity Apprenticeship Programme 2.0 goes beyond skills acquisition by offering participants a wide range of business advisory services. These include business and financial literacy training, mentorship support throughout the apprenticeship journey, access to Fidelity Bank’s women‑focused and SME financial solutions, as well as guidance on business formalisation and growth strategies.
Further emphasising the bank’s vision, Mr Ede said, “By integrating structured mentorship with entrepreneurial development, Fidelity Bank is positioning women not just as trainees, but as future employers, innovators, and economic contributors within their communities. This aligns with our mandate to help individuals grow, businesses thrive, and economies prosper.”
By Modupe Gbadeyanka
A new branch of The Alternative Bank (AltBank) has been opened in Ondo State as part of the expansion drive of the financial institution.
A statement from the company disclosed that the new branch would support export-oriented agribusinesses through Letters of Credit and commodity-backed trade finance, ensuring that local producers can scale beyond state borders.
For SMEs, the bank is introducing robust payment rails, asset financing for equipment and inventory, and supply chain-backed facilities that strengthen working capital without trapping businesses in interest-based debt cycles.
The Governor of Ondo State, Mr Lucky Aiyedatiwa, represented by his Chief of
Staff, Mr Olusegun Omojuwa, at the commissioning of the branch, underscored the importance of financial institutions in economic development.
“The pivotal role of financial institutions to economic growth and development of any economy cannot be overemphasised. It provides access to capital, supporting small and medium-scale enterprises and encouraging savings.
“Therefore, I have no doubt in my mind that the presence of The Alternative Bank in Ondo State will deepen financial services, create employment opportunities and stimulate economic activities across various sectors,” he said.
In her remarks, the Executive Director for Commercial and Institutional Banking (Lagos and South West) at The Alternative Bank, Mrs Korede Demola-Adeniyi, commended the state government’s leadership and outlined the lender’s long-term vision for Ondo State.
“As Ondo State steps into its next fifty years, and into the future anchored on the sustainable development championed during the recent anniversary celebrations, The Alternative Bank is here to be the financial engine for that vision. We didn’t come to Akure to hang banners. We came to fund work, farms, shops, and factories.”
With Ondo State’s economy anchored largely on agriculture, particularly cocoa production, poultry farming, and other cash crops, alongside a growing SME and trade ecosystem, AltBank is deploying sector-specific financing solutions tailored to these strengths.
For cocoa aggregators, processors and poultry operators, the bank will provide production financing, facility expansion support, machinery lease structures, and structured trade facilities under its joint venture and cost-plus financing models, with transaction cycles of up to 180 days for commodity trades and longer-term structured asset financing for equipment and infrastructure.
The organisation is a notable national non-interest bank with a physical network now surpassing 170 locations, deploying capital to solve real-world challenges through initiatives such as the Mata Zalla project, which saw to the training of hundreds of women as electric tricycle drivers and mechanics.
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